Essay
Forward contract
Trudel Builders Ltd. uses fir 2x6 lumber as its framing material. On November 15, 2020, Trudel enters into a forward contract for 1,500,000 board feet of lumber at $ 0.25 per board foot for March 2021 delivery. At December 31, 2020, the market price for March delivery is $ 0.26. On March 5, 2021, Trudel took delivery of 1,500,000 board feet for $ 0.25 and settled the forward contract. The market rate on this date was $ 0.28 per board foot.
Instructions
Record any required entries related to this contract.
Correct Answer:
Verified
Correct Answer:
Verified
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